Buffett Vs. Soros: Investment Strategies

Legendary investment gurus Warren Buffett and George Soros are two of history’s most famous and successful Wall Street figures. While both men have irrefutably achieved prominence in the finance realm, the paths they took to get there are largely divergent. This article profiles each of their unique stories.

Key Takeaways

George Soros and Warren Buffett are lauded as the most successful investors in history.

Buffett employs a value investing strategy, where he seeks out companies that exhibit strong fundamentals.

Soros is more of a speculative investor, who depends on short-term market movements and highly leveraged trades.

Soros and Buffett have successfully launched their own multi-billion dollar investment funds.

Warren Buffett

Warren Buffett made his first investment at age 11. And in his early 20s, he studied at Columbia University under the tutelage of his personal mentor, Benjamin Graham, who is widely known as the father of value investing. Graham argued that every security held an intrinsic value that was independent of its market price. This concept ultimately became the foundational investment philosophy of Buffett’s first fund, Buffett Partnership, Ltd., which he launched in 1956 with an initial $105,100 investment. Over the next 13 years, the fund mushroomed to more than $105 million in assets. Buffett eventually parlayed this success to create Berkshire Hathaway, a holding company for a multitude of businesses. It’s currently worth more than $510 billion, where each individual stock share is valued at an astonishingly high $308,000, mainly because Buffett refuses to perform a stock split on his company’s ownership shares.

With these three tenets, Warren Buffett has been able to make rational investment decisions in the face of economic fluctuations.

Warren Buffett: InvestoTrivia Part 1

George Soros

Born in Budapest in 1930, financial titan George Soros survived Nazi Germany-occupied Hungary and emigrated to the United Kingdom in 1947. Years later, after graduating from the London School of Economics, Soros began his professional career working for various merchant banks in the United Kingdom and the United States, before launching his first hedge fund, Double Eagle, in 1969. With the profits from this endeavor, Soros was able to seed his follow-up hedge fund: Soros Fund Management, in 1970. Since renamed the Quantum Fund, it ran from 1973 to 2011, during which time it returned roughly 20% to investors annually, boasting total net gains of more than $43 billion.

According to Soros, he shut down the fund mainly due to overly-stringent Securities and Exchange Commission registration requirements. But Soros continues to take an active role in the administration of Soros Fund Management, a subsequent hedge fund he founded.

The Bottom Line

Warren Buffett and George Soros will forever be regarded as two of the world’s most brilliant investing minds. While they employ radically different investing strategies, both men have achieved great success in their own disciplines.

Both Soros and Buffett are notable philanthropists, with Soros donating more than $11 billion to various causes, and Buffett pledging to give away 99% of his fortune to charity.